Question

Two institutions that were developed to provide banking stability in the United States after the great depression are

		FDIC insurance and efficient market hypothesis
		derivatives markets and the efficient market hypothesis
		FDIC insurance and a lender of last resort
		open capital markets and a nationalized banking industry

While capital outflow might arise from desire to avoid falling domestic asset values, speculative attack is motivated by

		profiting from expected depreciation of the currency
		profiting from rising domestic asset values
		private sector attempts to stabilize the economy when government institutions fail
		racism against emerging markets

Bank runs are still a common problem in the United States

True

False

Contagion of crises can stem from both trade and financial linkages

True

False

The international community lacks a reliable lender of last resort

True

False

Answer 1

1) FDIC insurance and a lender of last resort..

(In 1993 FDIC established in US that provides deposit insurance to the depositers in US and LOLR is an institutions to provide liquidity to financial institutions)..

2) profiting from expected depreciation of the currency.

(Major motivation for speculative attack is the belief that currency will be depretiates in the near future with high probability)..

3) False..

(After the introduction of FDIC in 1993 and LOLR the bank run problem in US is quite settled down)..

4) True..

(Contagion of crises can be caused from both trade and financial linkages and shows the interdependency of global market scenario)..

5) True..

(No effective international lender of last resort currently exists like domestic lender of last resort)..

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